The real question is, at what point is office space a wise investment?
When I was starting my practice, I asked a number of solos what their biggest financial mistake was. The answer? Office space. Too much of it, too fancy an address, too long of a commitment. Don’t get me wrong, a physical office is a good thing, but too much of a good thing when you’re just starting up can really bring you down.
Managing cash flow is one of the challenges of solo practice, and that means keeping overhead low. Yet you’re going to need to make smart investments. While Sam Glover’s famous $3,000 estimate is on the skinny side, the question is whether–or when–office space is a wise investment.
Yes, If You Need Dedicated Space or Staff
If you’re trying a leaner option (working at home, virtual office), look for clues you may need your own physical space. Are you meeting clients often enough that you’re constantly commuting to . . . an office? Have you ever wished you could bring a client (or potential client) back to your office for a more extended, private conversation? Do you have enough business that you’re thinking about hiring an employee? A dedicated office with a door that closes may be the answer.
Yes, If You Want To Give (and Get) Referrals
Solos often cite the desire to get referrals as a major reason for wanting a physical office—sharing space with other lawyers is a great way to get to know them and be thought of when they need to refer business. In my experience, just having a physical office is not enough; referrals ultimately depend on how often you’re there, and who else is there. Ideally, you want to find a space with other attorneys who have complementary practices. This means you’ll run across cases better suited for someone else in your office and vice versa.
What practices might be complementary to yours? A criminal defense lawyer might share space with a lawyer specializing in police misconduct, or a lawyer specializing in appellate practice. An office with practitioners in family law, immigration, bankruptcy, and employment law might be a source of cross-referrals. Spaces that host both transactionalists and litigators in the same field (business law, intellectual property, estate planning/probate) can also be a logical place for referrals.
Yes, If You Work Better Away From Home
Yahoo’s Chief Executive Marissa Meyer has taken a lot of heat for her decision to ban Yahoo employees from working at home, but she has a point—sometimes, there’s no substitute for being around other people when you need to solve problems or think things through. If you’re someone who thrives on face-to-face interaction and high levels of stimulation, a physical office or coworking space may provide the environment you need to be at your best. Or if you’re someone who finds it hard to make life and work balance at home, having a dedicated office away from home may be the secret to happiness.
I’m looking at you, solos with physical offices–when did you know it was time to rent office space? Tell us all about it in the comments.